Sonida Senior Living, Inc. Announces Fourth Quarter and Full Year 2023 Results
- Sonida Senior Living, Inc. achieved key milestones in 2023 with a focus on balance sheet optimization and operational improvements.
- The company's revenue increased by $6.0 million in Q4 2023 compared to Q4 2022, driven by higher occupancy levels and rent rates.
- Sonida's net loss for Q4 2023 was $14.6 million, but Adjusted EBITDA saw a significant increase of 103.5% year-over-year.
- The company's liquidity significantly improved with a $47.8 million equity private placement and debt restructuring.
- Sonida's weighted average occupancy for its portfolio increased to 85.9% in Q4 2023, showcasing operational efficiency.
- Community Net Operating Income margin improved to 27.4% in Q4 2023 compared to 19.3% in Q4 2022, indicating better financial performance.
- The company's revenue per available unit and revenue per occupied unit showed positive growth trends in Q4 2023.
- Sonida reported a net loss of $21.1 million for the full year 2023, but Adjusted EBITDA doubled to $33.9 million compared to 2022.
- General and administrative expenses increased due to transaction costs related to loan modifications and other expenses.
- Sonida's gain on extinguishment of debt in 2023 was $36.3 million, significantly higher than the loss in 2022.
- The company recorded a non-cash impairment charge of $6.0 million in 2023, impacting the overall financial results.
- Overall, Sonida Senior Living, Inc. showcased financial growth and operational improvements in 2023, positioning itself for future value creation.
- None.
Insights
The reported increase in weighted average occupancy by 200 basis points to 85.9% for Sonida Senior Living, Inc. indicates a positive trend in the senior living industry, reflecting a growing demand for such services. This uptick in occupancy rates is a critical metric for the sector, as higher occupancy directly correlates to increased revenue streams. The reported 11.2% increase in resident revenue supports this observation and is a testament to the company's operational efficiency and market appeal. Additionally, the successful restructuring of debt and the equity private placement of $47.8 million suggest a proactive approach to balance sheet management, which is essential for the company's sustainability and growth prospects.
From a market perspective, these developments could make Sonida an attractive prospect for investors seeking exposure to the senior living segment. The operational improvements and strengthened financial position may also provide the company with a competitive edge to capitalize on market dislocations. However, it is essential to monitor the long-term sustainability of these improvements, particularly in the context of broader economic conditions that could affect disposable income and, consequently, the senior living industry.
Analyzing the financial results of Sonida Senior Living, Inc. from a fiscal standpoint, the significant improvement in liquidity and the resolution of concerns regarding the company's ability to continue as a going concern is noteworthy. The infusion of cash from the private placement and debt restructuring has evidently bolstered the company's financial standing. The 103.5% year-over-year increase in Adjusted EBITDA is particularly impressive, suggesting that operational enhancements have translated into tangible financial gains. However, the reported net loss of $14.6 million for the fourth quarter, despite these improvements, warrants attention.
The gains on extinguishment of debt amounting to $36.3 million also have a notable one-time impact on the financials, which needs to be considered when assessing the company's operating performance. Investors should evaluate these results in the context of the company's long-term profitability trajectory and the sustainability of its cost management strategies. The increase in general and administrative expenses, partly due to transaction costs, suggests that while the company is investing in its growth, there is a need to maintain vigilance over expense management to ensure continued profitability.
The mention of non-GAAP financial measures, such as Adjusted EBITDA and Community Net Operating Income, is an important consideration for stakeholders. These measures provide additional context to the company's financial health beyond what GAAP figures reveal. However, it's important for stakeholders to understand the adjustments made and the reasons behind using these non-GAAP measures to ensure a comprehensive understanding of the company's financial position. The absence of state grants in the reported periods compared to the previous year also removes a variable that could have potentially skewed year-over-year comparisons, allowing for a clearer assessment of operational performance.
Moreover, the gain on extinguishment of debt related to the derecognition of liabilities following the transition of legal ownership of properties to Fannie Mae is a significant legal and financial maneuver. This action reflects strategic financial restructuring but is a non-recurring event that should be isolated when considering the company's ongoing operational performance. Stakeholders should also be aware of the implications of such legal and financial moves on the company's future obligations and operational flexibility.
“2023 was a transformational year for Sonida. We achieved significant performance milestones while accomplishing key strategic objectives and delivering industry-leading care and services to our residents. These achievements included balance sheet optimization through the comprehensive restructuring of our debt culminating in the
Fourth Quarter and Full Year Highlights
-
Liquidity significantly improved, resolving any uncertainty around continuing as a going concern. This was facilitated by our private placement executed in February 2024 resulting in cash proceeds of
$47.8 million -
Weighted average occupancy for the Company’s consolidated portfolio increased 200 basis points to
85.9% , comparing Q4 2023 to Q4 2022. -
Resident revenue increased
$6.0 million 11.2% , comparing Q4 2023 to Q4 2022. -
Net loss for the fourth quarter was
$14.6 million -
Fourth quarter Adjusted EBITDA, a non-GAAP measure, was
$9.3 million 103.5% year-over-year and0.3% in sequential quarters, driven primarily by continued improvement in operations. -
Net cash provided by operating activities was
$10.7 million $2.6 million -
Results for the Company’s consolidated portfolio of communities:
-
Q4 2023 vs. Q4 2022:
-
Revenue Per Available Unit (“RevPAR”) increased
12.6% to$3,470 -
Revenue Per Occupied Unit (“RevPOR”) increased
10.0% to$4,042 -
Community Net Operating Income, a non-GAAP measure, was
$16.3 million $10.3 million $6.0 million -
Community Net Operating Income Margin, a non-GAAP measure, was
27.4% and19.3% , for Q4 2023 and Q4 2022, respectively.
-
Revenue Per Available Unit (“RevPAR”) increased
-
Q4 2023 vs. Q3 2023:
-
RevPAR increased 70 basis points to
$3,470 -
RevPOR decreased 50 basis points to
$4,042 -
Community Net Operating Income increased
$1.6 million $16.3 million $0.5 million $16.3 million $14.2 million -
Community Net Operating Income Margin was
27.4% and24.8% for Q4 2023 and Q3 2023, respectively, representing an increase of10.7% .
-
RevPAR increased 70 basis points to
-
Q4 2023 vs. Q4 2022:
SONIDA SENIOR LIVING, INC. SUMMARY OF CONSOLIDATED FINANCIAL RESULTS THREE MONTHS ENDED AND YEARS ENDED DECEMBER 31, 2023 AND 2022 |
|||||||||||||||
Three Months Ended
|
Three Months
|
Years Ended December 31, |
|||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
Consolidated results |
|
|
|
|
|
||||||||||
Resident revenue (1) |
$ |
59,349 |
|
$ |
53,388 |
|
$ |
59,117 |
|
$ |
232,032 |
|
$ |
208,703 |
|
Management fees |
|
586 |
|
|
523 |
|
|
569 |
|
|
2,191 |
|
|
2,359 |
|
Operating expense |
|
44,367 |
|
|
45,073 |
|
|
44,486 |
|
|
177,323 |
|
|
171,635 |
|
General and administrative expense |
|
9,946 |
|
|
6,723 |
|
|
8,615 |
|
|
32,198 |
|
|
30,286 |
|
Gain (loss) on extinguishment of debt, net |
|
— |
|
|
— |
|
|
— |
|
|
36,339 |
|
|
(641 |
) |
Long-lived asset impairment |
|
— |
|
|
1,588 |
|
|
5,965 |
|
|
5,965 |
|
|
1,588 |
|
Other income (expense), net (2) |
|
(480 |
) |
|
1,348 |
|
|
— |
|
|
(532 |
) |
|
10,011 |
|
Loss before provision for income taxes (1) (2) |
|
(14,581 |
) |
|
(16,742 |
) |
|
(18,328 |
) |
|
(20,854 |
) |
|
(54,315 |
) |
Net loss (1) (2) |
|
(14,629 |
) |
|
(16,574 |
) |
|
(18,411 |
) |
|
(21,107 |
) |
|
(54,401 |
) |
Adjusted EBITDA (1) (3) |
|
9,302 |
|
|
4,572 |
|
|
9,270 |
|
|
33,904 |
|
|
16,981 |
|
Community net operating income (NOI) (3) |
$ |
16,260 |
|
$ |
10,324 |
|
$ |
14,690 |
|
$ |
57,899 |
|
$ |
41,418 |
|
Community net operating income margin (3) |
|
27.4 |
% |
|
19.3 |
% |
|
24.8 |
% |
|
25.0 |
% |
|
19.8 |
% |
Weighted average occupancy |
|
85.9 |
% |
|
83.9 |
% |
|
84.9 |
% |
|
84.6 |
% |
|
83.0 |
% |
(1) Includes
(2) Includes
(3) Adjusted EBITDA, Community Net Operating Income and Community Net Operating Income Margin are financial measures that are not calculated in accordance with |
|||||||||||||||
Results of Operations
Three months ended December 31, 2023 as compared to three months ended December 31, 2022
Revenues
Resident revenue for the three months ended December 31, 2023 was
Expenses
Operating expenses for the three months ended December 31, 2023 were
General and administrative expenses for the three months ended December 31, 2023 were
The Company reported a net loss of
Adjusted EBITDA for the three months ended December 31, 2023 was
Year ended December 31, 2023 as compared to year ended December 31, 2022
Revenues
Resident revenue for the year ended December 31, 2023 was
Expenses
Operating expenses for the year ended December 31, 2023 were
General and administrative expenses for the year ended December 31, 2023 were
Gain on extinguishment of debt for the year ended December 31, 2023 was
During the year ended December 31, 2023, the Company recorded a non-cash impairment charge of
Other expense for the year ended December 31, 2023 was
As a result of the foregoing factors, the Company reported net loss of
Adjusted EBITDA for the year ended December 31, 2023 was
Liquidity, Capital Resources, and Subsequent Events
Liquidity
At the beginning of 2023, the Company's liquidity conditions, including operating losses and net working capital deficits, raised substantial doubt about the Company's ability to continue as a going concern. As a result of increases in occupancy and rates occurring throughout 2023 and into the first quarter of 2024, annually scheduled rental rate increases in March 2024 and in connection with the 2024 private placement transaction and Protective Life loan purchase, the Company has substantially improved its liquidity position. Please see details below of the transactions which have increased cash on hand significantly. Based on these events, the Company concluded it has adequate cash to meet its obligations as they become due for the 12-month period following the date the December 31, 2023 financial statements are issued.
Securities Purchase Agreement
On February 1, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with affiliates of Conversant Capital and shareholders (together, the “Purchasers”), pursuant to which the Purchasers agreed to purchase from the Company, and the Company agreed to sell to the Purchasers, in a private placement transaction (the “Private Placement”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, an aggregate of 5,026,318 shares (the “Shares”) of the Company’s Common Stock, par value
The Private Placement occurred in two closings. At the first closing, which was completed on February 1, 2024, the Company issued and sold an aggregate of 3,350,878 Shares to the Purchasers and received gross cash proceeds of
The Company intends to use this new capital for working capital, continued investments in community improvements, acquisitions of new communities, broader community programming and other general corporate purposes.
Protective Life Loans
On February 2, 2024, the Company completed the Protective Life loan purchase of the total outstanding principal balance of
Ally Term Loan Expansion
On February 2, 2024, in connection with the Protective Life loan purchase, the Company expanded its outstanding loan obligation with Ally Bank in the amount of
Cash flows
The table below presents a summary of the Company’s net cash provided by (used in) operating, investing, and financing activities (in thousands):
Years ended December 31, |
||||||
|
|
2023 |
|
|
2022 |
|
Net cash provided by (used in) operating activities |
$ |
10,683 |
|
$ |
(2,578 |
) |
Net cash used in investing activities |
|
(16,562 |
) |
|
(36,904 |
) |
Net cash used in financing activities |
|
(7,113 |
) |
|
(22,652 |
) |
Decrease in cash and cash equivalents |
$ |
(12,992 |
) |
$ |
(62,134 |
) |
In addition to
The Company, from time to time, considers and evaluates financial and capital raising transactions related to its portfolio, including debt refinancings, purchases and sales of assets and other transactions. There can be no assurance that the Company will continue to generate cash flows at or above current levels, or that the Company will be able to obtain the capital necessary to meet the Company’s short and long-term capital requirements.
Recent changes in the current economic environment, and other future changes, could result in decreases in the fair value of assets, slowing of transactions, and the tightening of liquidity and credit markets. These impacts could make securing debt or refinancings for the Company or buyers of the Company’s properties more difficult or on terms not acceptable to the Company. The Company’s actual liquidity and capital funding requirements depend on numerous factors, including its operating results, its capital expenditures for community investment, and general economic conditions, as well as other factors described in the Company’s SEC filings.
Conference Call Information
The Company will host a conference call with senior management to discuss the Company’s financial results for the fourth quarter and full year 2023, on Wednesday March 27, 2024, at 12:30 p.m. Eastern Time. To participate, dial 877-407-0989 (no passcode required). A link to the simultaneous webcast of the teleconference will be available at: https://www.webcast-eqs.com/register/sonidaseniorliving_q42023_en/en
For the convenience of the Company’s shareholders and the public, the conference call will be recorded and available for replay starting March 28, 2024 through April 11, 2024. To access the conference call replay, call 877-660-6853, passcode 13743706. A transcript of the call will be posted in the Investor Relations section of the Company’s website.
About the Company
Definitions of RevPAR and RevPOR
RevPAR, or average monthly revenue per available unit, is defined by the Company as resident revenue for the period, divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the period.
RevPOR, or average monthly revenue per occupied unit, is defined by the Company as resident revenue for the period, divided by the weighted average number of occupied units in the corresponding portfolio for the period, divided by the number of months in the period.
Safe Harbor
This release contains forward-looking statements which are subject to certain risks and uncertainties that could cause our actual results and financial condition of Sonida Senior Living, Inc. (the “Company,” “we,” “our” or “us”) to differ materially from those indicated in the forward-looking statements, including, among others, the risks, uncertainties and factors set forth under “Item. 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2024, and also include the following: the Company’s ability to generate sufficient cash flows from operations, proceeds from equity issuances and debt financings, and proceeds from the sale of assets to satisfy its short and long-term debt obligations and to fund the Company’s acquisitions and capital improvement projects to expand, redevelop, and/or reposition its senior living communities; increases in market interest rates that increase the cost of certain of our debt obligations; increased competition for, or a shortage of, skilled workers, including due to general labor market conditions, along with wage pressures resulting from such increased competition, low unemployment levels, use of contract labor, minimum wage increases and/or changes in overtime laws; the Company’s ability to obtain additional capital on terms acceptable to it; the Company’s ability to extend or refinance its existing debt as such debt matures; the Company’s compliance with its debt agreements, including certain financial covenants and the risk of cross-default in the event such non-compliance occurs; the Company’s ability to complete acquisitions and dispositions upon favorable terms or at all; the risk of oversupply and increased competition in the markets which the Company operates; the Company’s ability to improve and maintain controls over financial reporting and remediate the identified material weakness discussed in Item 9 of our Annual Report on Form 10-K; the cost and difficulty of complying with applicable licensure, legislative oversight, or regulatory changes; risks associated with current global economic conditions and general economic factors such as inflation, the consumer price index, commodity costs, fuel and other energy costs, competition in the labor market, costs of salaries, wages, benefits, and insurance, interest rates, and tax rates; the impact from or the potential emergence and effects of a future epidemic, pandemic, outbreak of infectious disease or other health crisis; and changes in accounting principles and interpretations.
For information about Sonida Senior Living, visit www.sonidaseniorliving.com.
SONIDA SENIOR LIVING, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per share data) |
||||||||||||||
Quarters Ended December 31, |
Years Ended December 31, |
|||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||
Revenues: |
|
|
|
|
||||||||||
Resident revenue |
$ |
59,349 |
|
$ |
53,388 |
|
$ |
232,032 |
|
$ |
208,703 |
|
||
Management fees |
|
586 |
|
|
523 |
|
|
2,191 |
|
|
2,359 |
|
||
Managed community reimbursement revenue |
|
5,785 |
|
|
5,614 |
|
|
21,099 |
|
|
27,371 |
|
||
Total revenues |
$ |
65,720 |
|
$ |
59,525 |
|
$ |
255,322 |
|
$ |
238,433 |
|
||
Expenses: |
|
|
|
|
||||||||||
Operating expense |
|
44,367 |
|
|
45,073 |
|
|
177,323 |
|
|
171,635 |
|
||
General and administrative expense |
|
9,946 |
|
|
6,723 |
|
|
32,198 |
|
|
30,286 |
|
||
Depreciation and amortization expense |
|
10,137 |
|
|
9,508 |
|
|
39,888 |
|
|
38,448 |
|
||
Long-lived asset impairment |
|
— |
|
|
1,588 |
|
|
5,965 |
|
|
1,588 |
|
||
Managed community reimbursement revenue |
|
5,785 |
|
|
5,614 |
|
|
21,099 |
|
|
27,371 |
|
||
Total expenses |
|
70,235 |
|
|
68,506 |
|
|
276,473 |
|
|
269,328 |
|
||
Other income (expense): |
||||||||||||||
Interest income |
|
87 |
|
|
188 |
|
|
608 |
|
|
235 |
|
||
Interest expense |
|
(9,673 |
) |
|
(9,297 |
) |
|
(36,118 |
) |
|
(33,025 |
) |
||
Gain (loss) on extinguishment of debt, net |
|
— |
|
|
— |
|
|
36,339 |
|
|
(641 |
) |
||
Other income (expense), net |
|
(480 |
) |
|
1,348 |
|
|
(532 |
) |
|
10,011 |
|
||
Income (loss) before provision for income taxes |
|
(14,581 |
) |
|
(16,742 |
) |
|
(20,854 |
) |
|
(54,315 |
) |
||
(Provision) benefit for income taxes |
|
(48 |
) |
|
168 |
|
|
(253 |
) |
|
(86 |
) |
||
Net loss |
$ |
(14,629 |
) |
$ |
(16,574 |
) |
$ |
(21,107 |
) |
$ |
(54,401 |
) |
||
Dividends on Series A convertible preferred stock |
|
— |
|
|
— |
|
|
— |
|
|
(2,269 |
) |
||
Undeclared dividends on Series A convertible preferred |
|
(1,299 |
) |
|
(1,168 |
) |
|
(4,992 |
) |
|
(2,300 |
) |
||
Net loss attributable to common stockholders |
$ |
(15,928 |
) |
$ |
(17,742 |
) |
$ |
(26,099 |
) |
$ |
(58,970 |
) |
||
Per share data: |
|
|
|
|
||||||||||
Basic net loss per share |
$ |
(2.17 |
) |
$ |
(2.79 |
) |
$ |
(3.85 |
) |
$ |
(9.27 |
) |
||
Diluted net loss per share |
$ |
(2.17 |
) |
$ |
(2.79 |
) |
$ |
(3.85 |
) |
$ |
(9.27 |
) |
||
Weighted average shares outstanding — basic |
|
7,331 |
|
|
6,365 |
|
|
6,786 |
|
|
6,359 |
|
||
Weighted average shares outstanding — diluted |
|
7,331 |
|
|
6,365 |
|
|
6,786 |
|
|
6,359 |
|
||
Comprehensive loss |
$ |
(14,629 |
) |
$ |
(16,574 |
) |
$ |
(21,107 |
) |
$ |
(54,401 |
) |
||
SONIDA SENIOR LIVING, INC. CONSOLIDATED BALANCE SHEET (in thousands) |
||||
|
December 31,
|
December 31,
|
||
ASSETS |
|
|
||
Current assets: |
|
|
||
Cash and cash equivalents |
$ |
4,082 |
$ |
16,913 |
Restricted cash |
|
13,668 |
|
13,829 |
Accounts receivable, net |
|
8,017 |
|
6,114 |
Federal and state income taxes receivable |
|
— |
|
2 |
Prepaid expenses and other |
|
4,475 |
|
4,097 |
Derivative assets, current |
|
2,103 |
|
2,611 |
Total current assets |
|
32,345 |
|
43,566 |
Property and equipment, net |
|
588,179 |
|
615,754 |
Derivative assets, non-current |
|
— |
|
111 |
Other assets, net |
|
936 |
|
1,837 |
Total assets |
$ |
621,460 |
$ |
661,268 |
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
|
|
||
Current liabilities: |
|
|
||
Accounts payable |
$ |
11,375 |
$ |
7,272 |
Accrued expenses |
|
42,388 |
|
36,944 |
Current portion of notes payable, net of deferred loan costs |
|
42,323 |
|
46,029 |
Current portion of deferred income |
|
4,041 |
|
3,419 |
Federal and state income taxes payable |
|
215 |
|
— |
Customer deposits |
|
519 |
|
653 |
Total current liabilities |
|
100,861 |
|
94,317 |
Other long-term liabilities |
|
49 |
|
113 |
Notes payable, net of deferred loan costs and current portion |
|
587,099 |
|
625,002 |
Total liabilities |
|
688,009 |
|
719,432 |
| Commitments and contingencies | ||||||
Redeemable preferred stock: |
||||||
Series A convertible preferred stock, |
|
48,542 |
|
|
43,550 |
|
Shareholders’ deficit: |
||||||
Preferred stock, |
||||||
Authorized shares — 15,000 as of December 31, 2023 and 2022; none issued or outstanding, except Series A convertible preferred stock as noted above |
|
— |
|
|
— |
|
Common stock, |
||||||
Authorized shares — 15,000 as of December 31, 2023 and 2022; 8,178 and 6,670 shares issued and outstanding as of December 31, 2023 and 2022, respectively |
|
82 |
|
|
67 |
|
Additional paid-in capital |
|
302,992 |
|
|
295,277 |
|
Retained deficit |
|
(418,165 |
) |
|
(397,058 |
) |
Total shareholders’ deficit |
|
(115,091 |
) |
|
(101,714 |
) |
Total liabilities, redeemable preferred stock and shareholders’ deficit |
$ |
621,460 |
|
$ |
661,268 |
|
Sonida Senior Living, Inc. Consolidated Statements of Cash Flows (in thousands) |
||||||
Years Ended December 31, |
||||||
(In thousands) |
|
2023 |
|
|
2022 |
|
Operating Activities |
|
|
||||
Net loss |
$ |
(21,107 |
) |
$ |
(54,401 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
||||
| Depreciation and amortization |
|
39,888 |
|
|
38,448 |
|
Amortization of deferred loan costs |
|
1,552 |
|
|
1,281 |
|
(Gain) loss on derivative instruments, net |
|
2,981 |
|
|
(19 |
) |
Write-off of other assets |
|
— |
|
|
535 |
|
Loss on sale of assets, net |
|
118 |
|
|
43 |
|
Long-lived asset impairment |
|
5,965 |
|
|
1,588 |
|
Casualty impairments |
|
— |
|
|
1,100 |
|
(Gain) loss on extinguishment of debt |
|
(36,339 |
) |
|
641 |
|
Provision for bad debt |
|
1,151 |
|
|
1,159 |
|
Non-cash stock-based compensation expense |
|
2,749 |
|
|
4,327 |
|
Other non-cash items |
|
(53 |
) |
|
(498 |
) |
Changes in operating assets and liabilities: |
|
|
||||
Accounts receivable, net |
|
(3,249 |
) |
|
(2,354 |
) |
Prepaid expenses and other assets |
|
2,918 |
|
|
8,303 |
|
Other assets, net |
|
276 |
|
|
(141 |
) |
Accounts payable and accrued expenses |
|
13,013 |
|
|
(2,245 |
) |
Federal and state income taxes receivable/payable |
|
217 |
|
|
(601 |
) |
Deferred income |
|
622 |
|
|
257 |
|
Customer deposits |
|
(19 |
) |
|
(1 |
) |
Net cash provided by (used in) operating activities |
|
10,683 |
|
|
(2,578 |
) |
Investing Activities |
|
|
||||
Acquisition of new communities |
|
— |
|
|
(12,342 |
) |
Capital expenditures |
|
(17,938 |
) |
|
(24,562 |
) |
Proceeds from sale of assets |
|
1,376 |
|
|
— |
|
Net cash used in investing activities |
|
(16,562 |
) |
|
(36,904 |
) |
Financing Activities |
|
|
||||
Proceeds from notes payable |
|
— |
|
|
88,125 |
|
Repayments of notes payable |
|
(13,802 |
) |
|
(102,351 |
) |
Deferred loan costs paid |
|
(825 |
) |
|
(2,361 |
) |
Purchase of derivative assets |
|
(2,362 |
) |
|
(2,703 |
) |
Proceeds from issuance of common stock |
|
10,000 |
|
|
— |
|
Shares withheld for taxes |
|
— |
|
|
(261 |
) |
Dividends paid on Series A convertible preferred stock |
|
— |
|
|
(2,987 |
) |
Other financing costs |
|
(124 |
) |
|
(114 |
) |
Net cash used in financing activities |
|
(7,113 |
) |
|
(22,652 |
) |
Decrease in cash and cash equivalents |
|
(12,992 |
) |
|
(62,134 |
) |
Cash and cash equivalents and restricted cash at beginning of year |
|
30,742 |
|
|
92,876 |
|
Cash and cash equivalents and restricted cash at end of year |
$ |
17,750 |
|
$ |
30,742 |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
This earnings release contains the financial measures (1) Community Net Operating Income and Adjusted Community Net Operating Income, (2) Community Net Operating Income Margin and Adjusted Community Net Operating Income Margin, (3) Adjusted EBITDA, (4) Revenue per Occupied Unit (RevPOR) and (5) Revenue per Available Unit (RevPAR), all of which are not calculated in accordance with
Community Net Operating Income and Consolidated Community Net Operating Income Margin are non-GAAP performance measures for the Company’s consolidated owned portfolio of communities that the Company defines as net income (loss) excluding: general and administrative expenses (inclusive of stock-based compensation expense), interest income, interest expense, other income/expense, provision for income taxes, settlement fees and expenses, depreciation and amortization expense, revenue and operating expenses from the Company’s disposed properties; and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, or organizational restructuring items that management does not consider as part of the Company’s underlying core operating performance and impacts the comparability of performance between periods. For the periods presented herein, such other items include depreciation and amortization expense, gain(loss) on extinguishment of debt, gain(loss) on disposition of assets, long-lived asset impairment, and loss on non-recurring settlements with third parties. The Community Net Operating Income Margin is calculated by dividing Community Net Operating Income by community resident revenue. Adjusted Community Net Operating Income and Adjusted Community Net Operating Income Margin are further adjusted to exclude the impact from non-recurring state grant funds received.
The Company believes that presentation of Community Net Operating Income, Community Net Operating Income Margin, Adjusted Community Net Operating Income, and Adjusted Community Net Operating Income Margin as performance measures are useful to investors because (i) they are one of the metrics used by the Company’s management to evaluate the performance of our core consolidated owed portfolio of communities, to review the Company’s comparable historic and prospective core operating performance of the consolidated owned communities, and to make day-to-day operating decisions; (ii) they provide an assessment of operational factors that management can impact in the short-term, namely revenues and the controllable cost structure of the organization, by eliminating items related to the Company’s financing and capital structure and other items that management does not consider as part of the Company’s underlying core operating performance, and impacts the comparability of performance between periods.
Community Net Operating Income, Net Community Operating Income Margin, Adjusted Community Net Operating Income, and Adjusted Community Net Operating Income Margin have material limitations as a performance measure, including: (i) excluded general and administrative expenses are necessary to operate the Company and oversee its communities; (ii) excluded interest is necessary to operate the Company’s business under its current financing and capital structure; (iii) excluded depreciation, amortization, and impairment charges may represent the wear and tear and/or reduction in value of the Company’s communities, and other assets and may be indicative of future needs for capital expenditures; and (iv) the Company may incur income/expense similar to those for which adjustments are made, such as gain (loss) on debt extinguishment, gain(loss) on disposition of assets, loss on settlements, non-cash stock-based compensation expense, and transaction and other costs, and such income/expense may significantly affect the Company’s operating results.
(in thousands) |
Three Months Ended
|
Quarter
|
Years Ended
|
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
Consolidated Community Net Operating Income |
|
|
|
|
|
||||||||||
Net loss |
$ |
(14,629 |
) |
$ |
(16,574 |
) |
$ |
(18,411 |
) |
$ |
(21,107 |
) |
$ |
(54,401 |
) |
General and administrative expense |
|
9,946 |
|
|
6,723 |
|
|
8,615 |
|
|
32,198 |
|
|
30,286 |
|
Depreciation and amortization expense |
|
10,137 |
|
|
9,508 |
|
|
9,943 |
|
|
39,888 |
|
|
38,448 |
|
Long-lived asset impairment |
|
— |
|
|
1,588 |
|
|
5,965 |
|
|
5,965 |
|
|
1,588 |
|
Interest income |
|
(87 |
) |
|
(188 |
) |
|
(139 |
) |
|
(608 |
) |
|
(235 |
) |
Interest expense |
|
9,673 |
|
|
9,297 |
|
|
9,020 |
|
|
36,118 |
|
|
33,025 |
|
(Gain) loss on extinguishment of debt, net |
|
— |
|
|
— |
|
|
— |
|
|
(36,339 |
) |
|
641 |
|
Other (income) expense, net |
|
480 |
|
|
(1,348 |
) |
|
124 |
|
|
532 |
|
|
(10,011 |
) |
Provision (benefit) for income taxes |
|
48 |
|
|
(168 |
) |
|
83 |
|
|
253 |
|
|
86 |
|
Settlement (income) fees and expense, net (1) |
|
692 |
|
|
1,486 |
|
|
(510 |
) |
|
999 |
|
|
1,991 |
|
Consolidated community net operating income |
|
16,260 |
|
|
10,324 |
|
|
14,690 |
|
|
57,899 |
|
|
41,418 |
|
Resident revenue |
$ |
59,349 |
|
$ |
53,388 |
|
$ |
59,117 |
|
$ |
232,032 |
|
$ |
208,703 |
|
Consolidated community net operating income margin |
|
27.4 |
% |
|
19.3 |
% |
|
24.8 |
% |
|
25.0 |
% |
|
19.8 |
% |
|
|
|
|
|
|
||||||||||
COVID-19 state relief grants (2) |
|
— |
|
|
— |
|
|
478 |
|
|
2,926 |
|
|
1,213 |
|
Adjusted resident revenue |
|
59,349 |
|
|
53,388 |
|
|
58,639 |
|
|
229,106 |
|
|
207,490 |
|
Adjusted community net operating income |
$ |
16,260 |
|
$ |
10,324 |
|
$ |
14,212 |
|
$ |
54,973 |
|
$ |
40,205 |
|
Adjusted community net operating income margin |
|
27.4 |
% |
|
19.3 |
% |
|
24.2 |
% |
|
24.0 |
% |
|
19.4 |
% |
(1) Settlement fees and expenses relate to non-recurring settlements with third parties for contract terminations, insurance claims, and related fees. (2) COVID-19 relief revenue are grants and other funding received from third parties to aid in the COVID-19 response and includes state relief funds received. |
|||||||||||||||
ADJUSTED EBITDA (UNAUDITED)
Adjusted EBITDA is a non-GAAP performance measure that the Company defines as net income (loss) excluding: depreciation and amortization expense, interest income, interest expense, other expense/income, provision for income taxes; and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, or organizational restructuring items that management does not consider as part of the Company’s underlying core operating performance and impacts the comparability of performance between periods. For the periods presented herein, such other items include stock- based compensation expense, provision for bad debts, gain (loss) on extinguishment of debt, long-lived asset impairment, casualty losses, and transaction and conversion costs.
The Company believes that presentation of Adjusted EBITDA as a performance measure is useful to investors because it provides an assessment of operational factors that management can impact in the short-term, namely revenues and the controllable cost structure of the organization, by eliminating items related to the Company’s financing and capital structure and other items that management does not consider as part of the Company’s underlying core operating performance and that management believes impact the comparability of performance between periods.
Adjusted EBITDA has material limitations as a performance measure, including: (i) excluded interest is necessary to operate the Company’s business under its current financing and capital structure; (ii) excluded depreciation, amortization and impairment charges may represent the wear and tear and/or reduction in value of the Company’s communities and other assets and may be indicative of future needs for capital expenditures; and (iii) the Company may incur income/expense similar to those for which adjustments are made, such as bad debts, gain(loss) on sale of assets, or gain(loss) on debt extinguishment, non-cash stock-based compensation expense and transaction and other costs, and such income/expense may significantly affect the Company’s operating results.
(In thousands) |
Three Months Ended
|
Three months
|
Years Ended
|
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
Adjusted EBITDA |
|
|
|
|
|
||||||||||
Net loss |
$ |
(14,629 |
) |
$ |
(16,574 |
) |
$ |
(18,411 |
) |
$ |
(21,107 |
) |
$ |
(54,401 |
) |
Depreciation and amortization expense |
|
10,137 |
|
|
9,508 |
|
|
9,943 |
|
|
39,888 |
|
|
38,448 |
|
Stock-based compensation expense |
|
605 |
|
|
847 |
|
|
641 |
|
|
2,749 |
|
|
4,327 |
|
Provision for bad debt |
|
568 |
|
|
251 |
|
|
249 |
|
|
1,151 |
|
|
1,159 |
|
Interest income |
|
(87 |
) |
|
(188 |
) |
|
(139 |
) |
|
(608 |
) |
|
(235 |
) |
Interest expense |
|
9,673 |
|
|
9,297 |
|
|
9,020 |
|
|
36,118 |
|
|
33,025 |
|
Long-lived asset impairment |
|
— |
|
|
1,588 |
|
|
5,965 |
|
|
5,965 |
|
|
1,588 |
|
(Gain) loss on extinguishment of debt, net |
|
— |
|
|
— |
|
|
— |
|
|
(36,339 |
) |
|
641 |
|
Other (income) expense, net |
|
480 |
|
|
(1,348 |
) |
|
124 |
|
|
532 |
|
|
(10,011 |
) |
Provision for income taxes |
|
48 |
|
|
(168 |
) |
|
83 |
|
|
253 |
|
|
86 |
|
Casualty losses (1) |
|
348 |
|
|
1,167 |
|
|
204 |
|
|
1,008 |
|
|
2,050 |
|
Transaction and conversion costs (2) |
|
2,159 |
|
|
192 |
|
|
1,591 |
|
|
4,294 |
|
|
304 |
|
Adjusted EBITDA |
$ |
9,302 |
|
$ |
4,572 |
|
$ |
9,270 |
|
$ |
33,904 |
|
$ |
16,981 |
|
(1) Casualty losses relate to non-recurring insured claims for unexpected events. (2) Transaction and conversion costs relate to legal and professional fees incurred for transactions, restructuring projects, or related projects. |
|||||||||||||||
SUPPLEMENTAL INFORMATION |
|||||
|
|
Fourth Quarter |
|
||
|
|
Increase |
Third
|
Sequential
|
|
(Dollars in thousands) |
2023 |
2022 |
(decrease) |
2023 |
(decrease) |
Selected Operating Results |
|
|
|
|
|
I. Consolidated community portfolio |
|
|
|
|
|
Number of communities |
61 |
62 |
(1) |
61 |
— |
Unit capacity |
5,700 |
5,776 |
(76) |
5,718 |
(18) |
Weighted average occupancy (1) |
|
|
|
|
|
RevPAR |
|
|
|
|
|
RevPOR |
|
|
|
|
|
Consolidated community net operating income |
|
|
|
|
|
Consolidated community net operating income margin |
|
|
|
|
|
Consolidated community net operating income, net of general and administrative expenses (2) |
|
|
|
|
|
Consolidated community net operating income margin, net of general and administrative expenses (2) |
|
|
|
|
|
II. Consolidated Debt Information |
|
|
|
|
|
(Excludes insurance premium financing) |
|
|
|
|
|
Total variable rate mortgage debt (4) |
|
|
N/A |
|
N/A |
Total fixed rate debt |
492,998 |
535,303 |
N/A |
493,436 |
N/A |
(1) Weighted average occupancy represents actual days occupied divided by total number of available days during the quarter. (2) General and administrative expenses exclude stock-based compensation expense in order to remove the fluctuation in fair value due to market volatility.
(3) Includes (4) As of December 31, 2023, the entire balance of our outstanding variable-rate debt obligations were covered by interest rate cap agreements. |
|||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240327358726/en/
Investor Contact: Kevin J. Detz, Chief Financial Officer, at 972-308-8343
Press Contact: media@sonidaliving.com
Source: Sonida Senior Living, Inc.
FAQ
What is the ticker symbol for Sonida Senior Living, Inc.?
What were the key highlights for Sonida Senior Living, Inc. in Q4 2023?
How did Sonida Senior Living, Inc.'s revenue perform in Q4 2023 compared to Q4 2022?
What was Sonida Senior Living, Inc.'s net loss for the full year 2023?
What led to the increase in general and administrative expenses for Sonida Senior Living, Inc. in 2023?
How did Sonida Senior Living, Inc.'s Adjusted EBITDA perform in 2023 compared to 2022?
What was the company's gain on extinguishment of debt in 2023?
Did Sonida Senior Living, Inc. record any non-cash impairment charges in 2023?
How did Sonida Senior Living, Inc.'s Community Net Operating Income Margin change in Q4 2023 compared to Q4 2022?
What was the weighted average occupancy for Sonida Senior Living, Inc.'s portfolio in Q4 2023?
